Insurance Opt-Out Arrangements
Employers occasionally provide their employees with opt-out programs. An opt-out payment is a payment that:
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is available only if the employee declines coverage (which includes waiving coverage in which the employee would otherwise be enrolled) under the employer-sponsored plan, and
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cannot be used to pay for coverage under the employer-sponsored plan.
Proposed Regulations
Prop Reg 1.36B-2(c)(3)(v)(A)(7) defines an "eligible opt-out arrangement" as an arrangement under which the employee’s right to receive the opt-out payment is conditioned on:
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The employee declining to enroll in the employer-sponsored coverage and
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The employee providing reasonable evidence that the employee and all other individuals that the employee reasonably expects to claim as a dependent for the tax year or years that begin or end in or with the employer’s plan year to which the opt-out arrangement applies (employee’s expected tax family) have or will have minimum essential coverage (other than coverage in the individual market, whether or not obtained through the Marketplace) during the period of coverage to which the opt-out arrangement applies. For example, if an employee’s expected tax family consists of the employee, the employee’s spouse, and two children, the employee would meet this requirement by providing reasonable evidence that the employee, the employee’s spouse, and the two children, will have coverage under the group health plan of the spouse’s employer for the period to which the opt-out arrangement applies.
ARPA Special 2021-2025 Computation (Sec 9661)
Congress, in response to the COVID-19 crisis, modified the affordability percentages for years 2021 – 2025 (originally in the American Rescue Plan Act for years 2021 and 2022 and then extended by the Inflation Reduction Act of 2022). By substituting the following table in place of the normal table (the table for 2020 is also illustrated) the Premium Tax Credit for health insurance acquired through a government marketplace will substantially increase for those families within the lower poverty levels. Not only is the credit increased for taxpayers already eligible for the PTC, but with the income cap effectively eliminated, higher-income taxpayers will be eligible for the premium subsidies. The tables shown below are condensed versions. The actual tables look like the one in "Determining The Credit".
